Our recommendations

Improving value through better Crown entity monitoring.

We recommend that monitoring departments and Crown entities:

  1. work together to clearly document the monitoring framework they will use to support their monitoring arrangements. Monitoring frameworks should at a minimum:
    • set out the purpose and objectives of the monitoring;
    • set out the respective roles and responsibilities for the monitoring arrangements;
    • describe the information the monitoring department needs to monitor effectively. This should include the outcomes the Crown entity is trying to achieve, the information that measures a Crown entity's progress, any gaps the Crown entity should address, and an understanding of what "good" performance looks like;
    • set out how performance issues will be managed. This should include what happens if a Crown entity does not meet performance expectations and when and how monitoring departments should advise a responsible Minister about how a board is managing performance;
    • be developed in consultation with the relevant Crown entities, and take into account an entity's specific circumstances, functions, and activities; and
    • be supported by the responsible Minister;
  2. ensure that there is meaningful engagement in the development of Crown entities' accountability documents. This should include engagement on the operating context, challenges, goals, expectations, and performance measures; and
  3. share knowledge and seek to understand each other's operating context. This should include monitoring departments:
    • giving feedback to Crown entities about their performance in the context of the relevant sector and communicating key events that might affect relevant Crown entities; and
    • briefing other teams in their department about the challenges facing the Crown entities that they monitor to identify appropriate support where needed.

We recommend that monitoring departments:

  1. improve the quality of performance reporting about Crown entities, ensuring that reports to Ministers provide an independent view on:
    • a Crown entity's strategic and operational performance;
    • how the Crown entity is managing risk;
    • the potential impact of risks to both performance and outcomes; and
    • the results of regular board evaluations in a timely way.

We recommend that Te Kawa Mataaho Public Service Commission:

  1. continue to strengthen its support for, and oversight of, the Crown entity monitoring system. In particular, how it could:
    • assist monitoring departments and Crown entities in creating and applying effective monitoring frameworks;
    • promote good practice in monitoring departments and Crown entities, including supporting communities of practice and professional development for monitoring practitioners;
    • set expectations with chief executives of monitoring departments about the priority that needs to be given to effective Crown entity monitoring;
    • regularly assess the effectiveness of monitoring carried out by monitoring departments and hold departmental chief executives to account for meeting these expectations;
    • support effective Crown entity governance, such as providing advice for succession planning, talent management, and good practice tools; and
    • where monitoring is ineffective, provide additional advice and support to help monitoring departments and Crown entities improve.
  2. We recommend monitoring departments, Crown entities, and responsible Ministers regularly review monitoring arrangements to ensure that they remain fit for purpose.